Practical guide to Contract Management ebok

Major commercial contracts are awarded every day around the globe. Annual investments in energy, manufacturing, and building projects within the EU exceeds EUR 500 billion, and in Norway alone annual investments exceeds EUR 25 billion.i Investments in these areas are largely made pursuant to EPCI contracts awarded to build roads, buildings, offshore installations, pipelines, power stations, and other large industrial constellations. The contracts governing these investments invariably include: • the scope of work to be performed; • the schedule to be met; • the payments to be made; and • general and special terms and conditions. The terms and conditions vary depending on negotiating positions, priorities, jurisdiction and drafting tradition. However, the fundamental distinguishing factor is, and should always be, the scope of work. Differences in scope are likely to result in differences in all these provisions: just as each project is unique and tailor-made for a specific purpose, so is each contract unique and drafted as a means to a specific end, namely the delivery of the scope of work. The core of contract management is to understand the scope of work in the context of the contract’s terms, and thereby be able to apply the terms consistent with the commercial intentions and incentives and technical constraints and interfaces of the project. The contract manager should have a grasp of all areas of the project, from planning and engineering to cost control and project management. A contract manager must understand «who will do what and when,» and guide the project management from a legal perspective to safeguard the commercial interests of the project. This e-book is structured roughly chronologically to follow the stages of contract management during ordinary project execution. The main flow of topics discussed starts with tendering and contract negotiations, and then proceeds on to detailed design, procurement, mobilisation, project execution, testing, documentation, delivery and final accounts. This book is not intended to be a textbook for legal review of contracts, or a commercial guide for projects. It is rather an overview of key issues and lessons learned in our practical experience of managing a substantial number of contracts of all sizes within a wide range of business areas and jurisdictions: we aim to highlight best practices and areas for cost-savings and improved risk management.